Redundancy – Moving Through the Maze

The word “Redundancy” is one that often brings a feeling of foreboding for employer and employee alike.  With the emotional impact, plus the need to handle the process correctly, it is no wonder many employers are reluctant to take this path despite their business signalling the need for change. 

The reassuring news is that redundancy situations can be handled in a professional, considerate manner providing you have a good process and follow good advice.  The horror stories of redundancies ‘gone wrong’ can be avoided.  

Generally redundancy is where an employee’s employment is terminated because the position filled by the employee is, or will become superfluous to the needs of the employer. The key point is a redundancy is about a position not a person. 

The employer has a duty to consult with employees before making any final decisions about redundancy. This is a fundamental requirement. 

In practical terms, a simple consultation process requires: 

• A proposal is put to potentially affected employees, detailing the background, the proposed new structure, and the likely effect on individuals.
• Employees are provided with the opportunity to comment on the proposal, and a timeframe which is sufficient for the employee to seek advice and provide a considered response, noting employees can bring their representatives to the meetings if they wish.
• The employer must then consider all the feedback and alternatives to redundancy before making a decision. 

Before embarking on any restructuring process it is essential that the employer checks their Employment Agreements and Policies, and follow any process specified in those documents. 

Taking the time to prepare well, seeking advice on your intended process and following the provisions of your Employment Agreements, will significantly reduce risks associated with handling what is a relatively sensitive situation. Remember to be kind to yourself – this is a very difficult situation, where no-one is at fault. It is likely to be upsetting with tears and anger. The employee needs time to digest and react to the news that you may have been considering in the back of your mind for some time. Give them some time and space to react away from the workplace. 

Once the process is complete, you, your remaining team members and your business will then be in a better position to face the commercial challenges that drove the need for change. 

This material is provided as general information and is not intended as legal advice. Advice should be sought before taking any action in reliance of this article.